Living Time founder launches new annuity

Primetime Retirement, the new brand for Living Time, is to launch a new fixed term annuity product offering a fixed income with the potential to boost returns.

The Retirement Income Plan will be backed by an Investec structured deposit, offering retirement income, a fixed lump sum after the six year term and the potential for investment growth.

Created by Kim Lerche-Thomsen, who previously pioneered the fixed term annuity, the new product is written into a SIPP.

Lerche-Thomsen said that the company was looking for “a broader church of appeal than we were able to achieve before”, adding that advisers had asked for a product with the potential for investment upside.

Other benefits of the plan include the ability to leave before the term end due to ill health or the death of a spouse, civil partner or up to four named dependents.

It is not yet known what the annuity will cost, but Lerche-Thomsen says putting it in a SIPP wrapper makes it cheaper than a typical fixed term annuity.

It is also not know what index the structured deposit growth will be linked to, with the company hoping to release final details in March.

One potential issue is that the structured deposit will only be covered up to the Financial Services Compensation Scheme limit of £85,000, rather than having pension protection.

However, Lerche-Thomsen says that the average Living Time’s customer only had around £50,000 to invest.

Structured deposits have also had a chequered past with some advisers, polarising opinions in the community.

This is something that Stuart Wilson, marketing director at Primetime Retirement, acknowledged, “There will be an education process, we had to do it with fixed term annuities and we will do it again now.”

laura.suter@ft.com